AcuityMD, a leading technology provider to the commercial medical technology (MedTech) industry, today announced results of a new survey quantifying the value of contracts and the severity of poor contract management in MedTech. Two-thirds of respondents report that at least 70% of company revenue is earned through contracts and that percentage is anticipated to grow to 80% by 2027. All respondents say their companies could unlock additional revenue if they could fully leverage negotiated contracts.
Notably, the importance of contracts was anticipated to be even greater among the biggest companies. According to the survey, 73% of those with more than $1 billion in annual revenue estimate that 90% or more of their revenues will come through contracts within three years.
The 2024 survey titled “How Medical Device Companies are Managing Complex Contracts” was designed to understand the importance of contracts and contract management with health systems – especially independent delivery networks (IDNs) and group purchasing organizations (GPOs) – in MedTech. The survey included responses from more than 150 MedTech professionals director-level or higher from companies with a wide range of annual revenue.
Key findings include:
"The U.S. healthcare system is very stressed with a lot of consolidation, and it's challenging to keep a pulse on all of the different changes so you don't always understand who you are negotiating with any given week," explained Alex McLachlan, Intellijoint Surgical’s Director of Commercial. “Today, about 80% of our orthopedic surgeons are employed by a hospital. The byproduct of that is decisions are happening at a corporate or administrative level, so you might win over a surgeon, but the final decision maker is someone else."
AcuityMD Vice President of Strategic Growth Tom Middleton concluded: “The de facto response to contract management issues has been to hire more people, but that is expensive and doesn’t solve the root of the problem. MedTech companies that leverage innovative technology can harness contract intelligence to help salespeople find and close more on-contract opportunities faster to drive revenue and growth, and maximize the value of their hard-won contracts.”
<>Unpack all the results of the MedTech Dive survey with industry executives at AcuityMD’s 2024 Flywheel event today in Minneapolis, MN, and download the full survey report <>here<>.
In other news today, AcuityMD launched the first contract management technology solution to help reduce missed opportunities due to poorly managed contracts and speed close rates.
About AcuityMD
AcuityMD is a leading technology partner to the commercial medical technology (MedTech) industry. Thousands of sales and marketing professionals use AcuityMD’s intelligence platform to identify target markets, surface top opportunities, and grow their business. With customers ranging from pre-commercial to enterprise, AcuityMD is committed to delivering rich, high-quality insights in actionable ways to accelerate the adoption of medical technology. Its platform is currently used by six of the top 10 MedTech companies and has resulted in more than 25% sales growth for top active sales reps and $13 billion in opportunity pipeline.
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